The CBD industry outlook is still quite impressive despite setbacks due to the pandemic. In fact, some estimates project that the industry will grow at a CAGR of 47.49% over the next few years to reach more than $55 million USD by 2028. Other estimates are even higher.
Importantly, experts predict that the demand for hemp-based products CBD will return to pre-pandemic levels very soon. What’s more, interest in health and wellness products have increased since the onset of COVID, prompting greater interest in CBD-based wellness products.
CBD Industry Projection
According to an article in Forbes, the CBD industry could generate $19.5 billion by 2025 – IF the USDA approves CBD as a food additive. As it stands, only certain jurisdictions allow CBD-infused products, while others restrict their use due to confusion regarding their therapeutic status. BDSA, which is a cannabis market research firm, believes the USDA will oblige soon. Notably, this move will likely prompt a flood of CBD-based foods and beverages to enter the market.
Of the $19.5B in CBD product sales, ingestible CBD products will take up much of the pie pending USDA food additive approval. In fact, BDSA expects edible CBD products to account for roughly 77% or $14.92B. Pharmaceutical CBD products will likely account for about 12%, or $2.36B, while smokable CBD products will take up about 11% or $2.2B.
Other Factors Affecting CBD Industry Outlook
Cannabidiol, or CBD, is one of more than 100 cannabinoids that develops in both marijuana- and hemp-type flowers. Unfortunately, CBD often gets a bad rep due to its close association with psychoactive THC (the dominant cannabinoid in marijuana-type cannabis). However, thanks to the diligent effort of researchers, educators, and informed CBD businesses, many consumers are learning the stark difference between CBD and THC, and the amazing therapeutic potential of each.
Consequently, experts project that CBD industry outlook will improve as more consumers become aware promising CBD research. Education is key, especially in the form of peer-backed studies and reviews.
Another factor contributing to a positive CBD industry outlook are our ever-progressive CBD hemp laws. As the FDA continues to acknowledge CBD’s therapeutic potential, more lenient laws surrounding the substance will develop. Though the USDA legalized hemp-based CBD for commercial sale in 2018, a patchwork of laws has largely stunted significant progress. However, as the FDA and USDA continue to iron out details, and as more local areas follow suit, more widespread commercial operations will begin to take hold.
Finally, CBD market growth largely follows an increased focus on health and wellness. The COVID pandemic, in particular, has highlighted a profound need for wellness-based products, including both physical and mental health. Notably, CBD’s proposed therapeutic potential includes treating things like pain, sleeplessness, and mood problems, and more. As such, increased demand for this multi-faceted substance is expected.
COVID’s Impact on the CBD Market
COVID has impacted countless ways of living, including in-store sales in almost all economic areas. Specifically, government-imposed restrictions and social distancing have hindered many in-store operations. According to this Fortune Business Insights article, “84% of in-store operations were affected due to the pandemic.” Those who primarily manage brick-and-mortar stores were hit especially hard.
Those who manage e-commerce CBD stores, on the other hand, have witnessed profound growth. According to the Brightfield Group, online CBD sales increased by 61% from Q1 to Q2, 2020. They also found that new CBD consumers jumped during 2020’s Q3. This suggests an increased interest in CBD “self-care” to help cope with pandemic stress.
Market Demand by Location
Governments worldwide continue to develop more progressive CBD laws. However, the CBD market is especially active in the USA, Canada, Russia, and the UK. Other countries like Asia and the Middle East are slower to adopt these developing CBD trends largely due to misconceptions regarding psychoactivity.
CBD sales are most active in North America, accounting for roughly $1276.7M in 2020. The most common CBD product types in this area include cosmetics, pharmaceuticals, and food items, whereas smokable and ingestible items are more prominent in Europe due to rising demand for tobacco-free products. Finally, Asian countries like Japan and China currently favor hemp-based textiles.
What This Means for New and Established CBD Businesses
This promising CBD industry outlook is great news for both new and existing CBD businesses. As we come closer to pre-pandemic conditions, CBD businesses will be better able to sell their products both online and in-store.
Though traditional CBD products like tinctures and gummies still sell well, we’re finding an increased interest in health and wellness-based products, particularly unique items, and unique formulations. Higher potency products like Nano CBD are also in high demand, as are those that explore more vast cannabinoid profiles.
Those interested in starting or maintaining a successful CBD business are in luck! The CBD industry outlook proves that there is plenty of time to enter the space. This is especially true for those who sell high-quality wellness items.
Contact us to learn more ways we can help you build and maintain your CBD business. We offer numerous white- and private-label CBD products, many of which are fully customizable. With low minimum orders at exceptionally reasonable prices, you can always maintain stocked shelves with VCM.
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Abby is a freelance cannabis writer and Founder of Cannabis Content, a marketplace and training platform designed to connect cannabis creatives with businesses that need their services. Learn more at CannabisContent.net